NEW ORLEANS (AP) The Army Corps of Engineers can be held liable for flood damage caused by a “hurricane highway,” a navigation channel that is believed to have funneled Hurricane Katrina’s storm surge into the city, a federal judge ruled May 2.

The Corps of Engineers had argued that it was immune from liability because the channel is part of New Orleans’ flood control system. The law says the federal government cannot be sued if something goes wrong with a flood control project such as a levee, reservoir or dam.

Judge Stanwood Duval dismissed that argument, saying the Mississippi River-Gulf Outlet, or MRGO, was clearly a ship channel and not a flood control project.

Plaintiffs’ lawyers said Duval’s decision is a victory for homeowners, who have suffered setbacks in their efforts to hold the government legally responsible for storm damage. They also said it clears the way for a Sept. 8 trial.

The corps “threw everything they had at us, every legal argument they had, their spin on the facts,” said Pierce O’Donnell, one of the lead plaintiffs’ attorneys.

In January, Duval ruled that the corps was entitled to immunity over flood damage from levee breaches elsewhere in New Orleans.

The government had claimed its immunity should extend to the MRGO, but Duval said that channel and the levee system are separate projects with different funding methods and purposes.

“The United States should not be immunized for a tort which occurred from an activity unrelated to a flood control project,” Duval wrote. “Taken to its logical conclusion, such a policy would yield absurd results.”

Duval heard arguments from lawyers on both sides in March.

Duval issued a similar ruling in February 2007, when he denied a motion by the government to dismiss the case. This month’s ruling was significant because Duval was not swayed by subsequent testimony or by evidence the corps brought to have the case thrown out.

The MRGO suit was filed by five residents whose homes flooded after the August 2005 hurricane.